Closing the Loop with Enterprise Performance Management

As data and analytics become more commonplace, Chief Financial Officers (CFOs) are being asked questions that go far beyond financial performance and get to the organizational drivers beneath those traditional metrics. Their analyses are expected to be timely enough and of high enough quality that they can be used to direct the course for growth within the organization. This can be a challenge, especially given the breadth of underlying performance factors that impact top-line financials. A tool that is becoming more widely used to help understand, analyze and control the wealth of organizational data is the Enterprise Performance Management (EPM) system.

EPM systems are used to help define, align and control the financial cycle by maintaining quality and timeliness of data analytics while correlating financial metrics with the key business performance metrics that impact them. This capability is increasingly critical as businesses operate in hyper-competitive and evolving environments, with accountability for transparency, control and responsiveness to corporate leadership and governance, shareholders and regulatory agencies.

A similar discipline for managing IT financial data, Technology Business Management (TBM), is making strides in establishing next-generation metrics that help organizations achieve transparency and control in their IT spend in support of the evolving demands on IT. Companies are finding that they can improve cost transparency if they have not only actionable data but also the capability to rapidly analyze and visualize the data.

Like CIOs that use TBM, CFOs that are moving away from spreadsheets and legacy systems and are becoming more adept at using EPM data find they’re getting a more comprehensive view of the business metrics that drive the bottom line. They’re also finding they are able to tap into the functional expertise available in their organizations to better interpret what the data means for forecasting or evaluating performance, and how the data informs or is informed by various processes.

In the end, TBM and EPM tools need to support a business’ processes. Their value to the organization isn’t merely in financial reporting, it’s also in helping control the business processes of the financial cycle: strategic goal-setting, budgeting, forecasting and those processes used to collect the data needed for analysis and react to the results of that analysis. By enabling more accurate planning and budgeting, these tools help decision-makers lay the groundwork for automating, expediting, governing, tracking, measuring and monitoring organizational investments in their companies.

With these capabilities in place, leaders can quickly identify a new market or delay a high-risk spend initiative, and then respond just as quickly. The value becomes evident when a TBM solution helps companies maintain and reduce technical debt so they can shift dollars to innovate and grow the business, or when an EPM solution facilitates the integration of data and the connecting of dots across the business, especially when predictive analytics are used to help steer the future course.

Though EPM software compresses the time it takes to understand changes, accurately trace those changes to their origin and make adjustments needed to keep growth on track, it’s important to remember that software isn’t the magic bullet for all business challenges. It would be misguided to assume that, once you’ve invested in and deployed such a system, change automatically begins. The change that happens is only as good as the people who are executing it in their particular business context. Following the practices of organizational change management and supporting people through change is key to implementing a TBM or EPM solution that works. That’s how companies can best see the return on investment they expect and assure the growth they envision.

Ms. Chowning is a Service Integration and Management thought leader with over 25 years of transformation leadership experience within the IT Industry spanning product and operations service delivery, client relationship management, and strategic organizational change. She has leveraged her deep, IT leadership background and extensive experience implementing IT service and management strategies within multiple disciplines and industries to help clients drive strategic business alignment, manage their entire IT domain in an integrated fashion, increase quality, and decrease expense.

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Alex-Paul Manders

Recognized as a Top-Ten Innovator at Information Services Group (ISG), Alex-Paul Manders leads ISG's global Blockchain solutions line and also serves on ISG’s global Digital Leadership Council. Alex-Paul is a prominent industry thought leader on blockchain with hands-on technology experience and is sought out as a subject-matter expert presenter for university and conference presentations. In addition, Alex-Paul writes prolifically on blockchain and other relevant topics and has represented ISG in more than 40 articles featured in leading publications. Contact Alex-Paul at Alex.Manders@isg-one.com.

Kathy Rudy

Kathy Rudy is Chief Data and Analytics Officer of ISG and a member of the ISG Executive Board. She was named to this post in January 2020. Kathy is responsible for the development of ISG data solutions and platforms to deliver new and even more valuable insights to our clients, as part of the overall ISG Platform strategy. She is working across the firm to enhance our data products, develop data-driven consulting assets, and increase our go-to-market effectiveness. Throughout her 20 years with the firm, Kathy has supported hundreds of client organizations as they leverage data to drive greater efficiency and effectiveness in their IT operations, build measurement programs and support critical sourcing decisions. She was responsible for the development of ISG Inform™, the firm’s next-generation data-as-a-service platform solution, launched in 2019. Before joining ISG in 2000, Kathy, a graduate of Michigan State University, was part of the Unisys team that managed the transition from internally delivered IT services to an outsourced environment for the City of Chicago.